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Q1 2020: Markets Insights for Indirect Tax & Tax Technology

Each quarter, our team monitors the number of in-house vacancies released onto the job market across Europe to provide a quarterly overview of recruiting trends. The data below provides a digestible snapshot to the in-house market from adverts posted directly from employers.*

What happened in Q1?

Very few of us will be able to remember a more turbulent start to the year than that of 2020. As Britain officially waved goodbye to the EU on 31 January and entered a new phase in the Brexit journey, headlines shifted to the global pandemic of COVID-19. The economic impact of this pandemic has been substantial with stock markets around the world suffering their worst quarter since 1987.

As far as the market for indirect tax and tax technology recruitment goes, however, this economic downturn only began to impact hiring activity from March onwards. Fortunately, the year started strong with a great range of opportunities across Europe coming onto the market in January and February. Whilst March was an abnormally quiet month due to slowing business activity, Q1 boasted 94 jobs in commerce & industry in total (this figure doesn’t include FS & Insurance, which you can read about here). In comparison to the 98 vacancies in Q1 2019 - and in light of current events - a 4% drop in hiring is encouraging, demonstrating the steady demand for in-house indirect tax specialists. Furthermore, Q1 has also marked a busy month for new appointments. It's been great to see so many people successfully start a new job in a time when many offers in other sectors have been withdrawn or delayed.

Geographically speaking, Q1 followed similar trends to our data for 2019. The DACH market continues to prove itself as a core hub for indirect tax professionals, overtaking the UK&I and BENELUX with its volume of roles and also being the driver for tax technology hiring. The UK&I market was only just in the shadows but it was the lack of activity across BENELUX which really mirrored 2019 recruitment.

A closer look into commerce and industry trends

As we move into increasingly uncertain times for the global economy, we’ll be keeping a closer eye on the pockets of commerce and industry.

The nature of economics results in interchanging winners and losers. As such, challenging times lie ahead for certain industries such as retail, commercial aviation, oil, and hospitality who are likely to see a downturn in activity. Comparatively, one suspects that recruitment across pharma, e-commerce, and technology will remain buoyant.

Of course, the growth or stagnation of certain industries isn't an indication of increased hiring for indirect tax or tax technology specialists. Ultimately, the responsibilities of an indirect tax professional are to cut costs, therefore we don't expect in-house hiring to fall flat or be confined to particular industries. That said, we do predict that the likes of pharma and e-commerce will continue to lead the way in hiring activity due to consumer trends from COVID-19.

What were the trends at each level?

Figure 3 gives a clear indication of the demands across each grade in the UK&I, BENELUX, and DACH regions.

Those who have read Harvey John’s Global Indirect Tax & Tax Technology Report will recall that 2019 was characterised by a heightened demand for managers and a slow (but growing) year for senior recruitment. With 40% of roles being advertised at the manager grade and 14.8% being for assistant managers, the investment into the semi-senior level looks set to continue. Ultimately the volume of roles was lower this quarter, but the spread of vacancies is reflective of what we’ve been seeing over the last 12 months.

On the contrary, the demand for in-house tax technology professionals was down by 66% compared to Q4 2019. Whilst we can expect to see a steady number of postings for your general indirect tax roles, it’s likely that the business cases that tax leaders have been building for in-house technology capabilities will likely be put on the back seat until there’s a greater degree of economic certainty and business is back to usual. In professional services, however, we expect the demand for nice tax technology profiles to continue in Q2, albeit not at the rate we were seeing in Q4, January, and February.

Conclusion

Indeed, there are positives to take away from recruitment this quarter but we now look ahead to the impact that COVID-19 has on business activity in Q2 and Q3. We're set to experience a slow April and May as a result of this but we remain optimistic that the renewal of annual budgets for many companies in April will lead to increased demands in pockets of the market.

As we frequently say, indirect tax is a discipline that largely thrives during times of uncertainty - political or economic. Of course, whilst the coronavirus pandemic presents unprecedented challenges to businesses (and the uncertainty of the 2020 economic landscape still looms) indirect tax specialists are, by nature, an excellent resource of saving money. Therefore, we expect to see hiring continue but just at a slower rate to what we’ve seen in the past 6 months.

*We omit the number of confidential mandates that HJ are assigned or job adverts posted by other recruitment firms. It should also be highlighted that many vacancies go unadvertised due to confidential or highly sensitive searches.

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Alex Mann is an Associate Director in the Tax Division at Harvey John.